April 2022 Cattle Feeding Projections
April feedlot projections continue to show more black than red throughout the columns. Even with a continual increase in cost of gains (COG) the live board supports the most current asking prices as long as efficiencies are maximized.
Seeing dry matter ration costs in the upper $200’s and lower $300’s has many of us looking twice at our projections, bills and ration dynamics.
There continues to be so many things that are impacting the cattle nutrition field; war, drought outlook, cold weather keeping farmers out of the field, COVID-19 remnants, packer supply/control, inventories, etc.
We have certainly been at an $8.00/bu corn level before, however I don’t believe we have had as many other factors to contend with when trying to read the market. Feed costs and inventories are getting tight due to the drought and pushing more yards to purchase more feedstuffs in a time when we typically will see some relaxing of commodity prices. Distillers prices are at an all time high, pushed by the corn market but also demand over lots running out of feed. Urea prices have been at an all time high, and with distillers being at record levels there isn’t the, swap one for the other, option that has normally been the case. Concern over drought areas even being able to plant will continue to put pressure on energy prices. As the value of corn remains high, input costs for the 2022 crop may not drop back down to levels we would like, rather keeping cost of gains high through the next year.
While we start the peak season for grilling, cash prices may increase but certainly may not be as high as we would like them to be. Most packers are buying cattle on a dressed contract, which in the Midwest means, dry, clean, no/low tag cattle will do better on this contract. It would be an underestimate to believe that the packers don’t know exactly where they can push their dressed price to benefit themselves. Figuring and honestly figuring where your cattle’s dressing percentages average will help you understand what your live price will be. Using this value when running projections will give you a better idea of true breakeven on a set of cattle.
Large groups of straight Holsteins seem to be getting hard to afford and buy. With many dairy herds adapting to breeding cross cattle the amount of straight Holsteins genetic pool has certainly widened making it a bit more difficult to market pens of Holsteins that are as consistent as they have been in the past. This may also impact your contract value pending if you are on the $-12 or $-8 basis contract. Understanding this is important as we continue to market both straight Holsteins and Holstein crosses with the current market discounts and contracts available.
As always please work closely with your Form-A-Feed production and nutrition specialist to help improve your performance and look at cost/value of different feed ingredients and ration dynamics to continue to keep you profitable and competitive in this rapidly changing market.